Tax Litigation

The saga of tax litigation in India stretches back centuries. In ancient India, taxes existed in various forms, often collected through land levies or tributes. Disputes regarding these taxes were likely settled through customary practices or local adjudication mechanisms.

The arrival of British rule in the 18th century marked a turning point. The introduction of Western-style taxation systems, like the Permanent Settlement in Bengal (1793), laid the groundwork for a more formalized tax litigation process. However, it also brought disparities and discontent among Indian subjects.

Following independence in 1947, India embarked on a journey of building its own tax system and legal infrastructure. The Income Tax Act of 1961 became successful in establishing the framework for income tax assessment and dispute resolution.

Recognizing the growing volume of tax cases, the government established the Income Tax Appellate Tribunal (ITAT) in 1941. This dedicated tribunal aimed to provide a quicker and more accessible forum for taxpayers to appeal against assessments made by tax authorities.